Opinion Number. 1511

Subject

reduction of salaries: financial emergency financial emergency: reductions in salary: power of committee to revisit its decisions: power to make further recommendation: whether another authority may further reduce salary reduced by determination of minister: validity of further direction of minister that salaries should not be reduced below a certain amount

Key Legislation

FINANCIAL EMERGENCY ACT 1931 Part 11, ss 13, 12, 17: ACTS INTERPRETATION ACT 1901 s 33

Date
Client
Chairman of Committee, Public Service Board of Commissioners

The Secretary of the Public Service Board of Commissioners has forwarded me the following memorandum for advice:

In connection with the administration of the Financial Emergency Act advice is desired upon the following:

  1. Has the Minister power to again refer to the Committee, constituted under the provisions of section 13 of the Financial Emergency Act, any matter which has been already referred to the Committee and upon which a recommendation has been made by the Committee and a direction has been given by the Minister.
  2. Can the Minister refer to the Committee the matter of rates of pay of employees which have been fixed upon a direction by the Minister upon a recommendation of the Committee because of some later happening which, in his opinion, should be considered by the Committee in relation to rates of pay, e.g. fall in the cost of living.
  3. Has the Committee power to consider and make recommendations as to rates of pay of officers or employees in respect of which the Committee has already made a recommendation, and a direction upon such recommendation has been given by the Minister.
  4. If an award of the Commonwealth Court of Conciliation and Arbitration or determination of any other wage-fixing authority applicable to Commonwealth employees prescribes a rate of pay, salaries, or wages, now lower than that payable under a direction of the Minister under the Financial Emergency Act, can such lower rate be paid despite any provisions of the Financial Emergency Act.
  5. Would the Financial Emergency Act prevent the application of an award made since the commencement of that Act by the Commonwealth Court of Conciliation and Arbitration or by any other duly constituted wage-fixing Tribunal which would have the effect of varying salaries or wages at present paid under that Act.
  6. The Committee constituted under the Financial Emergency Act made a recommendation that the wages at that time of certain employees should be reduced by ten per cent. Such recommendation was submitted to the Minister and direction accordingly was given on 22.7.31. The department concerned was so advised on 23rd July, 1931. Subsequently, 12th August, 1931, without any further recommendation by the Committee, the Minister issued a further direction that the wage of no adult employee should be reduced, pending further instructions, below an amount equivalent to £182 per annum. Had the Minister power to give that further direction, having already given a direction on receipt of a recommendation from the Committee.

Section 13 of the Act constitutes a committee with power to make recommendations to the Minister as to certain reductions in salary or remuneration of officers, employees and other persons.

The Act in several places (e.g. section 12(i), (ii), (iii) and 17(2), (5)) provides that certain salaries and allowances shall be subject to such reduction as the Minister upon the receipt of a recommendation of the Committee directs.

Section 33 of the Acts Interpretation Act 1901–1932 provides that where an Act confers a power or imposes a duty, then, unless the contrary intention appears, the power may be exercised and the duty shall be performed from time to time as occasion requires.

It is necessary, therefore, to consider whether the power of the Committee to make recommendations to the Minister is one to which the provisions of section 33 of the Acts Interpretation Act apply, or whether there is a contrary intention appearing in the Financial Emergency Act 1931, so that the power having been once exercised the Committee is functus officio.

The general purpose of the Financial Emergency Acts was to effect certain reductions in the adjustable expenditure of the Commonwealth in accordance with the Premiers’ plan adopted at the Conference of Commonwealth and State Ministers held in Melbourne on 25th May, 1931.

The amount of requisite reduction was determined at the Conference and the specific reductions effected by the Financial Emergency Acts were, I understand, in accordance with the scheme contained in the Premiers’ plan.

The powers of the Committee are specified in sub-section (5) of section 13 of the Financial Emergency Acts. Under that sub-section the Committee is required to make a report and recommendation to the Minister specifying the reductions (if any) in the salary or remuneration of the officers, employees or persons concerned which, in view of the purposes of the Act as expressed in the preamble thereto, and of the reductions otherwise effected by Part 11 of the Act, the Committee deems just.

In making any recommendation the Committee was therefore required to have regard to the purposes of the Act. Those purposes were such as are mentioned above and were specified in the preamble to the Act.

The Committee has not in my opinion any general or continuing power of recommending reductions of salary or remuneration. Having made its recommendation as to any class of officers or employees for a reduction according with the Premiers’ plan it cannot in my opinion legally make a further recommendation arising out of other considerations.

The Financial Emergency Act effected reductions in salaries, wages, remuneration and allowances as fixed at the time of the commencement of the Act, by or under any other Act, or by or under any award, agreement, determination, order or decision of any authority having power to fix salaries, wages, pay or allowances.

Any fixation of salaries, etc., made by competent authority after the date of the commencement of the Act is not in my opinion subject to reduction by or under the Act unless made so subject by the authority fixing the salaries, etc.

The answers to the questions submitted are as follows:

(1) and (2) I do not think the Minister has power again to refer to the Committee any matter which has previously been referred to the Committee and upon which the Committee has made a recommendation. In any case the Committee as stated above has no power to make a second recommendation on any particular matter under the Act. The reductions effected by the Act are for a specific purpose, namely, compliance with the Premiers’ plan. Reduction cannot be recommended arising out of other considerations.

(3) This question has been answered by the foregoing.

(4) The Act effected reductions of wages as fixed at the time of its commencement. It does not prevent or affect any subsequent fixation of wages by competent authority. The answer to this question is in the affirmative.

(5) For the reasons above expressed the answer to this question is in the negative.

(6) The particular section of the Act under which the action was taken is not stated. In my opinion, however, the principles which govern action by the Committee in making recommendations also govern the power of the Minister to issue directions in pursuance of such recommendations.

Any reduction, having been effected by a recommendation of the Committee, followed by a direction of the Minister, cannot in my opinion be varied by any action purporting to be taken under the Financial Emergency Acts, but such variation may possibly be legal if done in pursuance of some authority conferred otherwise than by the Financial Emergency Acts.

[Vol. 25, p. 657]